The changing picture of local TV newscasts 

Posted: 6:41 pm Thu, November 5, 2009
By Liz Farmer
Daily Record Business Writer

When WJZ’s Sally Thorner announced she would be ending her longtime stint there as news anchor next month, the news was met with sadness, gratitude for her work and good luck wishes from Baltimoreans across the blogosphere.

That kind of loyalty from viewers is getting harder and harder to come by.

Thorner, 54, spent 10 years at WMAR before joining WJZ in 1993 and represents a generation of local anchors with whom viewers have a history. She and others, like WJZ’s Denise Koch and Vic Carter, WBAL’s Rod Daniels and Donna Hamilton, WBFF’s Jennifer Gilbert and WMAR’s Mary Beth Marsden and Jamie Costello, have become fixtures in Baltimore’s television news scene.

But as they leave the business, they will be replaced with younger, cheaper talent who will likely not have the same decades-long relationship with a city that their predecessors had.

It’s just one aspect of the changing business of local television news in a broadcasting world that has met increasing competition, decreasing advertising revenues and a more distracted audience over the years.

“People watch news differently now than they did in the Walter Cronkite era,” said Dana Adams, founder of Sonoma, Calif.-based Adams Broadcast Consulting. “But ‘Hard Copy,’ ‘Inside Edition,’ ‘Extra’ — those kind of flashy shows started changing that.”

Adams, a former broadcast journalist with NBC, said that when she covered the O.J. Simpson trial in the mid-1990s, the news was driven by visually dramatic scenes — including a police chase that shut down a freeway and the murderer’s black glove that didn’t fit Simpson’s hand.

“We saw a big shift there because we found that in the news, people wanted to be entertained as well,” she said. “Our ratings went through the roof.”

And with high ratings come higher advertising rates and more revenue. For stations affiliated with one of the major broadcast networks (NBC, ABC, CBS or Fox), local newscasts generate the lion’s share of their revenue. According to the Project for Excellence in Journalism, stations in 2007 made, on average, 45 percent of their revenue from news broadcasts.
But thanks to increasing competition from the Internet and cable news networks, local stations’ earning power — while still very good — is not what it used to be. Stations in the nation’s biggest television markets, like New York or Los Angeles, can still bring in $100 million a year. Those in markets ranked 100th or smaller, like Boise, Idaho, bring in about $5 million to $10 million a year, according to consultants. Baltimore is the 27th-largest market in the United States.

In 2007, revenue at news stations fell by an average of 10 percent to $23 million, compared with $26 million in 2006, according to the PEJ.

“This is probably the first time since TV has come into the scene and started doing local news seriously that we’ve had this kind of recession,” said Douglas Gomery, resident scholar for the University of Maryland’s Library of American Broadcasting. “This is the biggest test they’ve had.”

In Baltimore, six television stations averaged revenue of $33.6 million in 2007, according to SNL Kagan, the media and communications arm of SNL Financial in Virginia. But last year, that average fell 6 percent to $31.4 million, and SNL Kagan is predicting a 16 percent drop this year to $27 million per station.

The company expects the upcoming election years to help boost ad revenue to as high as $31.5 million in 2012. But revenues enjoyed before the recession may not return soon.

David Amy, executive vice president and CFO of Sinclair Broadcast Group, which owns WBFF and operates CW affiliate WNUV in Baltimore, said the decline of the auto industry in particular affected television ad sales. According to the Television Bureau of Advertising, car ads dropped by more than 50 percent in the second quarter of this year compared with the corresponding period in 2008.

Amy noted that political advertising in national election years helps increase revenues, but the Baltimore market is less affected because Maryland is not usually viewed as a battleground state.

Jay Newman, vice president and general manager of WJZ, said the advertising climate for his station has picked up in recent months.

“Part of that is advertisers are coming back to television, and part of it is [our] ratings … and that continues to improve and continues to be very, very strong with the strength of our news product and daytime programming,” he said.

While Newman would not give specific figures, he said advertising revenues began picking up in July, and he expects the trend to continue into next year.

Station managers at WBAL and WMAR did not return multiple requests for interviews for this article.

Media buyers say that, for the most part, ad revenues are dependent on ratings — and those numbers have been eaten away at over the last decade by the Internet and cable, which are drawing away younger audiences who live in an on-demand news culture.

“It’s come down to how people get their news and that defraying of ‘I’m watching the news at 6 p.m.’ to ‘I’ll catch it when I can on my BlackBerry, Internet, etc.,’ ” said Robert Miller, founder of Robert Miller Consulting in Cranbury, N.J. “The younger generation is really just, ‘If I want to know something, I’m going to look it up.’ ”

Jane Goldstrom, media director for MGH Inc. in Owings Mills, said better technology and more information about audiences have helped media buyers target their ad purchases to get the most bang for their clients’ bucks. In some cases, she said, a client’s target audience (particularly if it’s younger) may be better reached on the Internet than on the local news.

Local nightly newscast ratings are also highly driven by the primetime lineup that precedes them, which some say signals a departure from the loyalty that viewers used to display for news anchors.

In general, media buyers say, the 11 p.m. newscast that follows a highly rated 10 p.m. show gets the best rating that night. That notion has been put to the test with NBC’s new 10 p.m. show with comedian Jay Leno, a late night-style, Monday-through-Friday show in a time slot that had historically been reserved for dramas. In what advertisers are calling “the Leno effect,” NBC affiliates across the country are seeing their nightly newscast ratings fall because of Leno’s low viewership.

In Baltimore, NBC affiliate WBAL and CBS affiliate WJZ’s night newscasts have long vied for the top rating. In May, WJZ’s 11 p.m. newscast drew a 9.2 household rating, second to WBAL’s 10.2 rating.

But in October, WJZ’s nightly news led the field with a 7.4 rating while the rating for WBAL’s 11 p.m. newscast (ranked second) fell to 5.1.

“He’s been sort of a rollercoaster ride for ’BAL,” said Goldstrom. “We try to pick specific days to purchase [ads] because we have that lead-in issue with the ratings. With Leno, you can’t tell how it’s going to be because … sometimes it winds up great, other times not.”

She pointed out the change is a sign that loyalty to news anchors is becoming a thing of the past.

“Why would the late news be down on a down night of Leno if people really watched their favorite anchor?” she said. “We can see that’s not happening.”

Station officials take a different tact.

“I think the paramount factor is, what’s the image of your television station,” said WJZ’s Newman. “The stations that have the stronger images and brand identity and consistency of product, those are the ones that … do well regardless of the environment.”

Amy, the Sinclair executive, said the newscast has to stand on its own.

“If you have a strong lead-in, that’s going to help your news product if you have a decent product,” he said. “If you don’t, it doesn’t really matter how strong your lead-in is.”

Meanwhile, stations are cutting costs to deal with the rocky advertising landscape. Salaries make up the largest part of an operating budget, therefore staff is among the first to get cut.

It used to be that a reporter, editor and videographer would hop in the station’s $200,000 microwave truck to cover a story, said Miller. Today, it’s often a reporter with a handheld camera and a laptop who shoots, then edits and writes the story on his computer on site. Combining three jobs into one can save a station $50,000 to $120,000 a year, he said.

Automated control rooms can also save stations money, eliminating the need to fully staff the in-studio production team.

Stations are also pooling resources. Adams said a recent partnership in Honolulu between the NBC and CBS affiliates is being closely watched around the country. The two stations alternate and simulcast their newscasts and have essentially doubled their reporters, allowing them to expand their coverage.

Last year, WJZ partnered with The Baltimore Sun to share content and reporting resources. The deal allowed the station access to more reporters, and The Sun was able to amplify its multimedia content online. WJZ also has a partnership with the Mid-Atlantic Sports Network for sharing video and talent.

Newman said WJZ has tried to make cuts that don’t affect the news product.

“Do we have less people at the TV station? Yes. In the newsroom? A few, but not many,” he said. “We think we’re very well positioned now. From a business product standpoint, we look at where do we need to be and how do we get there in a cost-effective manner.”

Staff cuts and operational changes are all being made against a backdrop where local TV news is losing its dominance.

“You’re still making money, but it’s not what you’d make five years ago,” said Miller. “So you’re not necessarily growing your top line but you [preserve] your bottom line by streamlining.”

Consultants say that when the economy improves and ad revenue increases, local stations won’t necessarily put money back into reporters and resources now that they know they can run on less. In part, that’s due to the plethora of young talent, eager to get on-camera experience.

“The way these newsrooms are now being run and the salaries being paid — they’ve discovered they don’t have to pay big anchor salaries … and so far that’s not affecting ratings,” said Adams.

In some cases, that means the quality of journalism can suffer, she said. But in more cases, journalists are adapting to the multimedia world or they’re getting out of the way.

However, Amy said stations have to be careful not to take their viewers for granted.

“You can’t just throw junk at them and tell them it’s news,” he said. “They know the difference between a hard-working journalist and a lazy one.”
Miller said the competition means television stations will likely never enjoy the domination they once did in their markets, and small-market stations are being squeezed the most.

“Fifteen years ago it was really about talent and journalism and personality and a limited number of outlets,” he said. “If you had your license to broadcast over the airwaves it was … like a license to print money.”

But it’s also a matter of perspective, especially for the mid-major markets like Baltimore that are remaining profitable. There’s still plenty of money to be made by station owners, Adams said, but it’ll be in a very different world from their predecessors’.

“People talk about the end of local news and I don’t think that’s ever going to happen,” she said. “It will always be around, but how we deliver it is going to change.”